Is Global Arbitrage Ending in Art?

One of the most useful way to view the art market is as a sorting mechanism. Demand in one place creates supply in another often through the information of prices. Dealers have been a key component of the sorting machine, often buying in one part of the world and selling in another based upon their specific knowledge of the market.

Mr. Porter said what’s more striking to him this season is how international the market has gotten. “If there’s a leitmotif of this market, it’s that buyers are appearing from all over the world, and it’s dramatic.”

That hasn’t been good news for art dealers without the international networks. “What has really changed” in the past few years in the art world “is the old-style flipping of pictures—buying in Paris and sending it to London” or New York, and profiting on the price differential, said Mr. Jordan. “Now my friends who are dealers struggle at art fairs when buyers hold up their iPads and say, ‘You bought it for this there, and I’ll give you 5 percent more.'”